Developed in collaboration with the International Monetary Fund (IMF), the Mauritius Quarterly Projection Model (QPM) will serve as a central component of the Bank’s modernised Forecasting and Policy Analysis System.

The QPM provides the Bank with a framework to analyse macroeconomic trends, predict inflation, and simulate policy outcomes under different scenarios. According to the IMF working paper released in October 2025, the model captures the unique characteristics of the Mauritian economy, including its labour market structure, exchange rate dynamics, and fiscal policy, to produce more reliable projections.

The Bank of Mauritius adopted a flexible inflation-targeting regime in 2023, setting a target range of 2 to 5% with the aim of maintaining inflation near 3.5% in the medium term. The new model integrates this approach by allowing policymakers to assess how changes in interest rates or external shocks could affect inflation and output.

The model’s design includes a fiscal block and a labour market component, which provide deeper insights into how government spending, wage pressures and unemployment interact with price stability. It also factors in external influences such as global oil and food prices, reflecting Mauritius’s vulnerability as a small open economy.

IMF economists described the QPM as both theoretically sound and empirically robust, noting its “strong in-sample forecasting performance”. They added that the tool enables the Bank to generate baseline forecasts, counterfactual simulations and alternative policy scenarios, enhancing transparency and communication with the public.

The introduction of the QPM places Mauritius among a growing number of emerging economies in Africa and Asia that are adopting data-driven policy frameworks. The IMF said the model will help the central bank conduct forward-looking monetary policy, support economic stability, and respond more effectively to shocks affecting inflation, growth, and employment.

–ChannelAfrica–